depression. but even though we've seen massive drops in home value, we've seen 8.9% un--% unemployment, the longest unemployment since the great depression, even though we've seen so much economic devastation, they're back here right now calling for the same old thing. it's crazy. it's amazing. and it's actually quite scary. but we stand for the american dream. . we stand for liberty and justice for all, liberty and justice for all. folks, unless you live by it, it's just words. you have to put meaning into these words to really make a difference. liberty and justice for all. shared prosperity, shared costs, not just one or the other. so bank of america, as i said,

didn't pay a penny of federal income tax in 2009. bow boeing, despite receiving, didn't pay a dime incorporate income tax between 2008, 2009 or 2010. citygroup, deferred income taxes amounted to a grand total of zero. tamente, siti group paid its staff lavishly. one member of the investment bank is the highest paid executive for the second year in a row, he got $9.5 million. sitigroup is a big tarp recipient. exxon mobil, big oil tax chargers, used oil subsidiaries

in the caribbean and they paid taxes in 2009, not a single penny of it went to the american treasury. this is the same year that the company over took wal-mart in fortune 500 and exxon mobil c.e.o., 29 million. general electric, 2009, world's largest corporation filed more than 7,000 tax returns and still didn't pay anything to the american government. g.e. managed to do this with a rigid tax code that subsidizes companies for losing money. with the aid of republicans in congress whose campaigns they financed they exploited our tax codes and who do republicans blame? the middle class. republicans blame public employees, who are america's every day heroes.

public employees are america's every day heroes. think about it. if somebody breaks into your house, who are you going to call? a public employee. who is going to help apprehend the people who stole your stuff? a police officer. if your house starts on fire, who are you going to call? a firefighter. if your kid goes to public school, who are makes sure your kid guess in your child's ability to learn. who does that? teachers. heaven forbid you have an emergency medical technician. who is that? public employees. these public employees who have been viciously slandered in wisconsin and in other places,

they don't deserve that. they are hard-working people and when we are running out of burning buildings, they are running into them and they deserve better than what they have been getting. that goes to federal employees, too. they inspect our water and take care of our national forests and parks and make our government run and they do a pretty good job. in order for them to have a decent life, in order for them to prosper -- you hear the republicans talk, you think a government employee, an american hero, you think they are just the ones who are living lavishly and get too much. they have nothing to say about these bonuses. anyone hear talk about how it is ridiculous for the c.e.o. of

exxon to be making $29 million a year? you don't hear that. it's time for those millionaires and billionaires to start uponnying up. i joined january schakowsky and other members to introduce the fairness in taxation act. millionaires and billionaires should be giving in charity and not getting charity and should be giving in charity and not getting charity. deficits are rising because republicans are not -- excuse me, are giving a pass to the special interests who aren't paying their fair share and time to put that money into the hands of people who are working. it's time to level the playing field. according to a recent poll, march 2, 2011, with 81% of support, the most popular way to reduce the deficit is by placing

a surtax on federal income taxes who make more than $1 million a year. you would be surprised to know if we taxed them, it would raise about $78 billion. $78 billion. it's time for millionaires and billionaires to pay their fair share. middle class is disappearing and no accident. over the last 30 years, there has been the most dramatic and deliberate redistribution of wealth on the middle class up to the millionaires and billions airs and right before the great depression and equality in this country been ridiculous. wages have stagnated despite enormous gains in productivity, meaning we are making more than in the same amount of time. we have technology and we are pretty good at what we do. where did the money go? where did the money go?

the richest 1% which owns 34% of the nation's wealth, more than the entire bottom 90%. the top 1/10 of 1%, i'm talking the richest of the richest now makes $27 million per household. average income for the bottom 90% of americans, $31,000. bottom 90% average income, 31,000 a year. mr. speaker, a lot of people who tune into c-span, they make $31,000 a year. they have relatives and friends who make $31,000 a career. you might be a brand new teacher making $31,000 or a brand new cop making $31,000 a year. but guess what? the top 1/100 of 1% makes $27

million a year on average. they can't pay anything? they don't want to pay to help head start. they don't want to help to pay pell grants. it's a shame. and i would think they would pony up and do the right thing. so, mr. speaker, i want to say it's always a pleasure to come before the house for the special order for the progressive caucus . but tonight, i just want to leave one thought, mr. speaker. and that one thought is liberty and justice for all, no exceptions. everybody. and i yield back. the speaker pro tempore: the gentleman yields back his time.

the speaker pro tempore: for what purpose does the gentleman from minnesota rise? the question is on the motion to adjourn. those in favor say aye. . those opposed, no. the ayes have it. the motion a

>> on c-span tonight, the head of a u.s. nuclear regulatory commission testifies about the release of radiation from the japanese nuclear power plant. later, the house financial services committee questions elizabeth warren about the creation of a new financial regulatory agency. nucleare on at japan's power plant. the head of the nuclear regulatory commission discussed the emergency there, which may have exposed workers to lethal

doses of radiation. this is the second part of a hearing on the house energy subcommittee. it is an hour and a half. >> i will call the meeting back to in order. you were called away for a meeting. everybody has given their opening statements. i would recognize you for 5 minutes for your opening statement. >> thank you to you, mr. chairman, you and the other chairman of the subcommittees. and other members of the subcommittee. i am honored to appear before you on behalf of the u.s. nuclear regulatory commission. given the events unfolding

overseas, my remarks will focus on the events in japan. i will be happy to answer questions on those matters. i would like to offer my condolences to all those affected by the earthquake and tsunami in japan over the last few days. my heart goes out to those dealing with the aftermath of these disasters. i want to indulge the tireless efforts and the dedication of the nerc staff and other members of the regulatory family reacting to the events in japan. this is another example of the dedication of the nerc staff to protecting public health. regulates the

safe and secure use of nuclear energy within the united states, we also enter iraq throughout the world. we have been operating on a 24- hour basis to monitor the events at the nuclear power plants in japan. since the earthquake hit, some reactors have lost their cooling function, leading to a hydrogen explosion and rises in radiation levels. experts on boiling water reactors have an deployed to japan as part of the u.s. international agency for the development team. they are currently in tokyo. within the u.s., the nerc has been coordinating their efforts with other agencies. this includes monitoring radioactive releases and predicting their path. given the thousands of miles between japan and the united

states, hawaii, alaska, and the u.s. coast, we are not expected to experience any harmful levels of radioactivity. examining all information is important to analyze the event and understand its implications for japan and the united states. the nerc has been working with other agencies. the u.s. nuclear facilities remain safe. we will continue to work to maintain that level of protection. u.s. nuclear power plants are built to withstand environmental hazards including earthquakes and tsunamis. even those located outside of locations with seismic activity are designed for this. we require that safety systems and components be designed to take into account the most

severe natural phenomenon recorded for the site and the surrounding area. we have accounted for the historical data's actors say. u.s. nuclear power plants are designed to be safe based on historical data based on the area's maximum credible earthquake. our focus is always on keeping plants in this country safe and secure. as the immediate crisis in japan comes to an end, we will look at any information we can gain from the event and look at changes within our own system. i will meet on the current status and to begin a discussion on how we will systematically and methodically review information from the events in japan. we will continue to monitor plants to make sure that the u.s. reactors will remain safe.

we will provide updates by press releases in our public log. the nerc plans to offer more technical assistance as needed. we hope that japan will be able to recover from this terrible tragedy. i would like to give you a brief update on what we believed the status of the reactors in japan is. there are four reactors that we are monitoring as best we can. they are all at the fukushima member bank of one site. they were all operating at the time of this. we believe that in general for these reactors, they have suffered some cord damage from insufficient cooling caused by the loss of offsite power and the inability of the on-site generators to operate successfully following the tsunami. we believe that for the three

reactors, see water's being injected with stabilize cooling. for unit number 2 at this site, we believe that core cooling is not stable. we also believe that primary containment is continuing to function. for unit 2, we believe that the spent fuel level is decreasing. we believe that the spent fuel integrity has been compromised and there has been water interaction. in addition to the three reactors operating at the time of the incident, a fourth reactor is under concern. this reactor was shut down at the time of the earthquake. what we believe at this time is that there has been a hydrogen

explosion in this unit due to an uncovering of fuel in the fuel pool. we believe that secondary containment has been destroyed and there is no water in the spent fuel pool and we believe that radiation levels are extremely high, which could impact the measures. we have an iaea report that the water level is down a little bit as well. for the final reactor, we do not have any significant information at this time. recently, the nerc made a recommendation that based on the information that we have a up for a comparable situation in the united states, we would recommend any evacuation to a

much larger radius that has been provided in japan. the ambassador in japan has issued a statement to american citizens that we believe is appropriate to evacuate to the larger distance up to approximately 50 miles. the nerc continues to provide assistance to japan as needed. we will continue our efforts to monitor the situation with the limited data available. that is the summary of where we stand. i would be happy to answer the questions that you have. >> we appreciate you being with us this afternoon. in the early question and answer period with secretary chu, the gentleman from massachusetts had referred to a finding by mr. john ma relating to be a design,

he had indicated that mr. ma had some serious reservations about the design. i was just curious, have you had the opportunity to review his concerns and have you come to any conclusions about that? >> we have done a very review of the at-1000 design. we have had a vibrant discussion among the members of the nerc staff. we have thoroughly reviewed some of the concerns by our staff members. we believe that that design going forward can be acceptable. it is in the process of an additional review. we do our designs almost like a regulation.

we allow them to be commented on by the public. we are in that stage of the review. our concerns would enhance the safety of the design. we do not believe they are necessary to meet to restrict regulations. >> thank you for that comment. i just wanted to follow up on that. as a result of what has happened in japan, the focus is on safety as it relates to nuclear. i believe is a safe industry. historically, it has been a sick industry. france, japan, a lot of their energy comes from nuclear. you can correct me if i am wrong. it takes roughly 10 years to obtain permitting for a nuclear plant. am i in the ballpark when i say 10 years or not?

>> right now, the process takes closer to five years to go through the permitting. we are not finished. we are getting to the end of our reviews. i would like to think about this in the way when i went to college. people go to college with the intent to graduate in four years. as you go through that process, you take your class's and you do well, you have a chance to get through in four. some people take a little bit longer time depending on how things go. i think we have improved our understanding of how to make the process worked effectively and efficiently. this has been the first of its kind effort. this is something we had not done in a long time. we are moving at a relatively effective pace. keeping our focus first and

foremost on safety. >> in your testimony, you did say that you evaluated these permit applications for seismic and tsunami activities. >> that is correct. we review all designs for a wide range of natural disasters. tsunamis, earthquakes, tornadoes, it depends on the geographic location. >> everyone is focused on safety. more focus on safety, i know there is some more technology based on sodium- cooled reactors. i have been told that there is not a possibility of a meltdown and these are smaller type

plants. maybe 50-100 megawatt plants. i was wondering if you would comment on that technology. >> we currently do not have any specific applications in front of us for a sodium-cooled the design. it is a different kind of technology than what we currently have operating in this country. presents its own challenges when it comes to safe operations. i would not want to speculate too much on what those kinds of challenges are. we have not gone through the specific review of one of these. a larger or smaller energy output, usually the risks are smaller. the sodium reactors to present a slightly different technical challenges because of the way they operate. the sodium has to be maintained in liquid form. there are different types of

risks and hazards you would have >> that technology was not developed in the united states at one point. there are some countries that have some of these plants in operation. is that your understanding? >> yes, but we do not have any operating in the united states. >> i would like to recognize the gentleman from illinois, the ranking member. >> i want to thank you, mr. chairman. welcome to the committee. i wanted to get my japan question in first. the question is first and foremost on the mind of many of my constituents in illinois where we have had more reactors in illinois than any other state.

my constituents are asking a simple question. that question was summed up in a news headline on sunday. should illinois be worried about its nuclear plants? before you answer the question, i would like to note that illinois lies within the earthquake zone. we do not have to worry about tsunamis. what assurances can we give to the people of my state with a high concentration of nuclear reactors that sits on an earthquake zone. would you please speak to the possibilities and to the effect that a tornado -- we are in a tornado zone, that tornadoes can

have on nuclear reactors? >> at the nerc, we focus every day to make sure that nuclear power plants continue to operate safely. all nuclear power plants within the united states are reviewed against a very significant standard for seismic activity. we take what we can find from historical record, we look at the rock and the geology, we determine what the largest earthquake is that can happen in an area. we do an analysis of what kind of a fact it will have on the power reactor. what kinds of forces will id field? what we require that nuclear power plants can withstand that kind of event.

that is a part of what we do for every reactor in the country. the seismic activity may be different in the midwest as opposed to another part of the country. >> in japan, it was not the earthquake that was the problem, it was the tsunami that really caused the problem. in terms of a tornado. >> we look at tornadoes as well. we look at all natural phenomenon. hurricanes, tornadoes, earthquakes, tsunamis. some sites in the country do not experience all of those phenomenon. we try to capture all of the phenomenon that occurs. in illinois, we will look at the impact of tornadoes and other extreme weather events.

>> the number one threat to nuclear facilities in this nation is terrorists and activities. how are the nerc handling the threat of terrorism? >> we have a very robust program that requires nuclear utilities to ensure that they can protect their plant against terrorist type attack. that includes a very strong program to do exercises once every three years to actually participate in a mock terrorist attack on the facility. we oversee that and ultimately use that as a way -- >> once every three years? >> we do conduct our normal

inspections at the facilities to make sure that all of the security systems are in place and operating effectively. i would ask in addition, following september 11, we required on nuclear power plants to look at some of the more severe kinds of impacts from a terrorist attack or other types of severe natural phenomenon. >> my time is almost over. on friday, i am heading to dresden to give a speech in a rural county in northern and illinois. i will give them your regards. >> i appreciate that. we are happy to have some very fine people at our power reactors.

>> thank you, mr. chairman. welcome. when the license board returns its decision, and aired -- a decision tonight, when did that happen? >> that was the end of june. >> is it not true that all commissioners participating in the decision have already filed votes on that matter including you? >> we have filed what we consider preliminary views, which we exchanged among our colleagues on the commission. those are views that we used to inform our final decision making. >> you said it -- you are saying you have not had a final vote? >> we have not come to a decision at this point. >> you have not filed final votes? >> we have not reached a final decision. i am not sure your familiarity

with voting. i would consider votes to be more akin to prepared statements and remarks from members of the commission. the practice of the commission is to circulate those prepared marks in anything that we do. based on those circulated views, we work to make sure there is a majority position. >> you are saying on october 9, 2010, there were not final votes cast by all commissioners. >> we prepared our written statements that we circulated. >> those written statements are considered votes? >> they are considered votes, but they are not the final decision of the commission. >> since you have written statements that are considered votes, when do you plan to schedule a commission meeting? >> we will have a meeting and issue an order when we have a majority position.

>> you have the statements that are considered votes, but you do not have a majority position? >> the terminology is unfortunate. these votes are not final -- the final statement of a commission. a formal hearing we issue the final statement. >> is there a minority decision already rendered by commissioners? by the chairman? >> there is the decision by the commission. >> was the nerc decision to close out yucca and yours alone or one made by the full commission? >> i made that as chairman of the agency. >> what was your legal authority to do so? >> my legal authority was as chairman of the commission. my decision was fully consistent. >> your credit -- position is that the budget zeroed it out.

i would think that the difference is that you would have the legal authorities do that. >> i would respectfully disagree with that. >> we would review that and follow up. you would not do anything that would be illegal, would you? >> of course not. >> and begging to differ, i think it is the staid -- stated federal position by law and that yucca mountain should be open. that is the legal authority. there is no legal authority to close the mound. the only legal authority has been the administration in compliance with leader reid to close yucca mountain. >> our decision is consistent

with all appropriations law. >> you had better be double checking your facts. we are not through with this debate on legal authority. i hope that you are well prepared. we have been told that the courts may not rule about whether the position is legally defensible until the full committee takes a position. you seem to be preventing that vote from occurring. if court runs out of patience and does rule, will you abide by the court's decision? >> the agency will act according to any decision of the courts or congress. >> at this time, i recognize the gentleman from california for five minutes. >> thank you, mr. chairman. welcome. i know you are busy and i appreciate you coming back to our committee. last week, you and i talked

about the president's budget and the proposals to gopac to fi08 for your funding. with what happened in japan, this is not the time to go after our nuclear regulatory commission. i hope that will get the votes. let me talk about a local issue. i think all politics are local. texas has one proposed nuclear plant that is pending. they are receiving funding for cps energy and tokyo electric power co., which represents part of the problem. they own the one of the sites experiencing problems in japan. knowing what may happen with their potential investment, they have announced that they are having trouble finding new investors. we have low natural gas prices.

for somebody to buy into a long- term investment of nuclear power, which our country needs, but we may not be able to get the investors. can you talk about plants like the one in texas and how long nerc is taking to get the expansion to the south texas plant that is just south of houston. just some of information on how long it took for that expansion. it goes through your process and the omb. >> the south texas project was one of the first projects that we received four new licensing. the review will be focused on security. we are continuing to do that review. we are nearing significant

milestones for the completion of that reactor. that sign is down for public comment as a part of the process. if we resolve these comments and their successful and we move forward with the final reviews that are necessary, possibly within 12 months or so. i want to reiterate, our focus is on the safety and security. >> you said it was one of the first applications. can you tell me the time frame that it was filed? >> approximately 2007. within seven months, we had to suspend our review. the office made a change in the vendor that they were using for the design. that took about a year and a half to work through that particular issue. >> i know the concern for the

whole world and our own country, making sure we are learning four -- from what happened in japan, i understand that the texas plant has three safety backup systems instead of two. in texas, emergency power sources are separate. we do not have a problem on the gulf coast with tsunami is or earthquakes. we do have a hurricane everyone's in a while and tornadoes. i understand they have water concrete tight buildings. i do not think in geological time that we have had an earthquake along the gulf coast. our soil is soft. we look at all of the applications for safety. >> we look at all of the plants for a variety of natural phenomenon. on the gulf coast, seismic

activity, hurricanes, other types of events. we do have other analyses to look at tsunami is. we would not expect tsunamis to be of the same magnitude. >> the plant is about 11 miles inland. it is not right on the coast. sometime, i would like if the staff could provide to the committee some of the technological answers for the current and proposed plants in the united states compared to what happened in japan with the tsunami and then the earthquake. >> the gentleman from michigan is recognized for five minutes. >> i just want to say a couple of things at the beginning. i certainly did appreciate the meeting that we had four or five weeks ago. we discussed yucca.

we have a different view, but we have ample time. sometime this spring, we can fully talk about that and ask a number of questions. we both support safe nuclear power. we both support rigorous oversight of all of our 100th forsites a -- 104 sites around the country. i look or -- at looked around your center to make sure that things were safe. can you tell us what the functions were of the 11 folks that you sent to japan and what they are doing. they are reporting back to you some of the information you might have received. >> they are providing a variety of services. they are helping to organize a look at the reactors.

in nuclear look at the reactors and helping to provide a good, coordinated team to provide assistance in japan. >> to as -- in just --does japan have a similar operation to the one i just visited in maryland. >> they are working with their counterparts in the japanese nuclear regulatory authority. >> our ambassador has urged all americans to move at least 50 miles away. what reaction did you receive from your counterparts in japan? >> i am not familiar. >> that is -- and that announcement was made a very shortly, like an hour ago. about 45 minutes ago. you talked about the four

different reactor vessels. do you know where the hydrogen explosion was in the fourth reactor? >> at this point, we do not know that specific kind of information. we believe there was a hydrogen explosion at some point because the spent fuel in the back reactor has lost its cooling and at some point was producing some degree of hydrogen. that led to an explosion. >> was that explosion today? >> no. it occurred several days earlier. >> as it relates to your budget, that was the original task for you to be here today. what is your budget for safety oversight? >> the bulk of our budget, probably about three-quarters of our budget goes to the reactor's safety work. about 77%. it is approximately $800

million. >> my two sites in my district, i know you've indicated to come out. on all of my visits, i have always stopped to welcome the oversight of the staff that you have there. >> is mostly salaries and benefits. we have a small portion that his contract in dollars. about 60% is the salaries and benefits of the staff. >> do you have any reason to believe that your proposed budget is not adequate to monitor the nuclear power plant safety systems? >> at this time, we believe it is a sufficient request to do the work we need to make sure that the plant stays safe. the only caveat that i whitney, if it becomes apparent that we

need additional resources to address issues related to the situation in japan, we would have to come back and ask for additional resources for that. >> would you be able to determine that within the next couple of weeks. >> i can meet with the commission in the next several days. that would be the first. we want to systematically and direct what we need to look at and what are important sources of information. >> you do not have been reserve cushion to do that today as of the year 2011? >> at this time, i will say that we do not necessarily have that. >> i appreciate your willingness to be up here, as tough as it is today. we appreciate your answers. we look forward to working with you on a host of issues. >> we recognize -- recognize the gentleman from california.

>> you recognize the situation in japan. somebody from the university union used the word apocalypse to describe the potential damage that could occur in japan. what was your reaction to this comment? could japan be facing devastation from a widespread nuclear meltdown or devastation -- radiation released? >> people are working diligently to try to address the situation. it is a very sick -- and very serious situation without a doubt. i thought it was very important for the agency to make the statement that we did. we thought in a comparable situation in the united states, we would have issued the evacuation instructions to enlarge the distance away from the plant. efforts are on going to try to resolve this. it will be some time before it

is finally resolved. >> you are recommending any evacuation of u.s. citizens within 50 miles. what is causing you to make this recommendation? >> it is based on the current conditions at the site. because of the damage to the east andfuel p -- spent fuel pool, we believe there is significant radiation around the site. there are more of a backup to a backup safety cooling system. if anything goes wrong, it would be difficult for emergency workers to get to the site and performed emergency actions. the cooling actions could be lost. if they are lost, it would be difficult to replace them. that could lead to some type of

release. as a crude measure with a comparable situation in the united states, we will be looking at any evacuation to a larger distance. >> the spent fuel problem in unit four, is that the greatest concern? >> it is all of these factors together. it is the combination. there is the possibility of this progressing further. in this country, you would probably take a prudent step of issuing any evacuation for a larger distance. >> high levels of radiation are being released from the pool. >> we believe our around the reactor site that there are high levels of radiation. >> what would be the significance of that? >> first and foremost, it would be very difficult for emergency

workers to get close to the reactors. they could experience a lethal doses in a shortperiod of time. that prompted the agency to make the statement that they did. >> if emergency workers cannot get in there because of the danger to themselves, what would be the possibility to deal with this problem for the spent fuel stocks -- fuels? >> i do not want to speculate because we do not have information on the ground. >> you described serious risks at these facilities. can you describe the highest risks and why? >> in japan? it has been the situation from the beginning. the efforts are to keep the reactor school.

the three reactors that were operating at the time of the earthquake. we are operating with a variety of different systems. they have lost a lot of their electrical power in offsite power capabilities. the other risk is spent fuel that may be in the spent fuel poos at 6 -- fuel pools at six of the sites. keeping the water in there is important. the indication that i was referring to was a crack in the spent fuel pool. if there is a crack, there is the possibility of water draining from the pool.

maintaining the appropriate level of water and p theool -- in the pool could lead to damage. >> what is the best case and worst case scenario for japan? >> the best efforts are to provide cooling to the reactors and provide cooling to spent fuel pools. it is a very dynamic situation. a lot of efforts are being undertaken. this is really a u.s. government responseth. e nerc -- the nerc is providing a response. >> thank you very much. the gentleman from texas is recognized for five minutes.

>> thank you for being here on a very difficult day for you. you may have answered some of these questions before or commented that in your opening statements. i apologize if they have already been addressed. my understandings are that the safety systems at the power plants and the reactors in japan are an older technology that active back up and the license is that you are reviewing now is a different system that has a passive back up. if something happens catastrophic, the system automatically shut itself down and the cooling system can perpetuate itself without outside power. is that correct? >> i would not want to comment too much on the japanese sites. they are a little bit different

than the designs we have in this country. we are reviewing new reactors that have a passive cooling system. it is thought all of the designs that we are reviewing. it is only two of the designs we are looking at. >> my understanding is that there is one new nuclear power plant under construction. that is the southern facility in georgia. their safety system is a passive space -- safety system. you will not have a tsunami in central georgia, but you could have an earthquake. if it were to have an earthquake, it would automatically shut itself down without intervention. the coolant is a cooling system that perpetuates itself without any outside power. is that correct? >> the system that is used for

that particular design does essentially rely on gravity to initiate circulation of gravity through the reactor and naturally circulate based on the heat flow. there are other safety systems that do rely on the offsite power. >> we could say, in that instance of the one new plant that is under construction, what happened in japan, assuming the construction of the plant is robust enough, that the containment is not destroyed by the earthquake in terms of cooling the reactors and shutting down the reactors, they would be shut down and they would stay cool. >> i would not want to speculate on everything. we know that there was an earthquake, we know there was a

tsunami. we know a lot of safety systems have not functioned. at this point, i do not want to speculate on how that applies to any u.s. facilities. >> i am not asking you to speculate on what happened in japan. if an earthquake hit a power plant in georgia based on your agency's review of your safety design, which they withstand that earthquake? >> all of the plants that we are currently reviewing will meet strict safety standards on earthquakes and other natural phenomenon. we believe that they can withstand an earthquake and they can meet the high standards. we have not completed our review. i did not want to prejudge the outcome of that. >> you are allowing this plant in georgia to be constructed.

you have approved something. >> it is an approved for a limited amount of construction activity. >> in general, for each plant in the united states, regardless of where it is located, does it have a minimum safety requirement to withstand an earthquake? >> that is true. all of the plants have requirement to deal with the kinds of earthquakes we would expect within about a 200-mile radius of that power plant. >> if a plant is in an area that is more prone to earthquakes in might have a higher requirement that an area that has not had an earthquake in 500 years. they would all expect to withstand a design criteria? >> we would -- and they are required to be able to withstand

the maximum possible earthquake based on the historic record. >> the earthquake that hit japan is the fifth most powerful ever recorded -- recorded in the world. that is obviously a very powerful earthquake. in the united states, is the design criteria currently for that level of an earthquake or is it for an earthquake that would be the standard that hit san francisco in 1906? i would like you to answer. >> it is important. i would like to try to give a demonstration. we talked a lot about the magnitude of the earthquake. that is not one n theerc looks at. if you look at the couple of water and think of that as the nuclear reactor, it should

probably be filled it with water. >> this is going to make tv, so do it right. >> i practiced before i started. the earthquake, when you talk about the magnitude of the earthquake, it would be like me hitting the table with my fist. it makes the class over here vibrate. that is what we actually measure and we designed our nuclear power plant around is the shaking of the power plant. the action hit -- the actual impact depends on where i hit in reaction to the class. if you have a larger quake very far away, it may not have the same impact on a site that -- as an earthquake that is a little bit less, but much closer. we look at all of the different for earthquakes that could happen within the region. we look at what that shaking is. if we make sure that shaking can

handle the maximum historic earthquakes in the region. in addition to that, we know that we do not always know everything. we have done a lot of studies over the years to look at earthquake phenomenon biondi designed to earthquake. we have had the plants go back and see if there are things to do to prepare for an earthquake and nobody has thought of or seen. we they have the ability to mitigate that of occurrence. it is a multi-layered system. if i could briefly summarize one other point, in addition to that, following september 11, we require all the nuclear reactors in this country to pre-stage

equipment that can perform this emergency last-ditch effort to cool the reactors and the fuel. that is a variety of procedures and different types of equipment that are required to be at the reactor sites. we have inspected the reactors to make sure they have that. that gives you another level of defense beyond what the design of their reactor is. >> thank you. >> something was stated earlier that i need to clarify. do you say that unit 4 in japan that there is no water that unit

3 was in danger of using the water? " we believe that unit for may have lost basic -- >> we believe that you met four men have lost significant inventory. our information is limited. we believe there is a crack in the spent fuel well in unit 3. >> diabolo canyon sits on the fault zone. in 2008, the geological survey informed us that a new fault had been found called the shoreline fault. you are of -- you are where the law that requires -- the energy commission recommended that

independent peer-reviewed advanced seismic studies be performed. q. you think the nrc should -- do you think the nrc should take advantage of all the -- without providing duplication? >> i cannot get too far into some of these issues because we do have an ongoing hearing related to some of the very points that you have raised. we are prohibited from discussing those things outside the context of the commission. >> right. i will tell you what it seems to me and my constituents. having the best minds working together and looking at the seismic issues makes the most sense. first and foremost, this is about safety. seismic concerns also impact affordability and region as

well. this is -- not to deploy from the authority of the federal agency, but to work with other agencies, i look forward to working with you in this area. >> we actually did post a workshop within the last year. we had technical experts have a discussion for the point that you said. we're certainly always open to hearing to give permission from any technical expert who can provide information to us. but the decision making has to come from our experts that. >> right. my constituents have become increasingly concerned about the preparation for a station black eddy van. they want to be assured that at the power will be available to -- station blackout event. they want to be assured that the power will be available in such

an event. nearly citations were given to -- merely sufficient for given to the utilities for not being prepared. >> we intend to do a very systematic and methodical look at any lessons we can learn from this japanese incident. i would certainly keep your suggestion in mind. >> finally, like you to address some safety issues in the event of an earthquake. dabble kaelin -- plo canyon has an evacuation plan. there's -- diabolo canyon has an evacuation plan. it was ruled that it was non-

credible that there could be multiple catastrophes at the plant. with the commission had determined that a bizarre concentration of events occurring is very small. not only is this conclusion well supported by the record evidence, we have just witnessed an earthquake, a tsunami, and a nuclear meltdown all occurring in sequence. i want to ask the commission, if you would on my behalf, do you still believe that the chance of a bizarre concentration of events is merely hypothetical? do you think this should be revisited in light of the events in japan? >> i certainly will take your suggestion that to the commission. i want to review the entire document in its entirety because, certainly, we do examine the possibility of

earthquakes as an initiating event for a possible reactor problem. of course, we do believe we have systems in place that would, one, really prevent any core damage from that, but, too, with subsequent problems, we have mitigating strategies. i would be happy to look at that document. >> thank you. in conclusion, mr. chairman, that is what they said two weeks ago, no doubt, in japan as well. we have seen in the past year three major sources of energy uses, coal, oil, and nuclear all experiencing tragic accidents. i do look for to working with you, with your commission, on the number one goal of keeping our energy sources safe. thank you. >> thank you. >> if i could just add, you

understand, we have not had any nuclear incidents in this country in the last year. the incidents were in other countries. >> the gentleman from was surging it is recognized. >> thank you, mr. chairman. does the nrc still have the authority, in light of what has happened in japan -- i assume you still have the authority to provide permits to continue the design implementation of nuclear facilities. >> the agency is an independent regulatory -- >> is there any delay? are you hearing anything that would set up -- i would expect some extension might be necessary. what would you suggest as a reasonable time frame for someone making an application?

>> the process of reviewing an application for a nuclear power plant is very extensive. i think there will be some lessons that we learn, both the applicant and the agency. i do not want to get into speculating how long or surmising how likely to happen. we will do a thorough job to secure safety. >> do you have some r&d money allocated for researching alternate uses for spent fuel rods? >> in our budget right now, we currently have significant resources for spent fuel and transportation. but we have a small piece of our budget that is looking at reprocessing and developing a framework for reprocessing,

which would perhaps be -- >> i would like to know a little bit more about it. the scope to the yoke of mountains for a moment. i do not know -- let's go to the yucca mountain's for a moment. it was mine understanding that consumers are still paying on the utility bills the funds for the project. is that accurate? >> i believe, but that is not an area that the nrc has authority over. >> but is that accurate? >> i believe it is paired again, i do not follow that very closely other than -- i believe it is. again, i do not follow that very closely other than what is in the news. >> what about shipping port. i think that was the first facility had in this country.

when was shipping port open? >> i do not have the exact date for the initial license, but it was early on in the u.s. nuclear program. >> in light of their circumstances, will you be looking at some of the older facilities to see what new technology -- has shipping port been upgraded all along? >> is no longer in operation. >> what happens when the shipping port goes out of operation? >> when they go lot of service, the reactors are decommissioned. we have the commission a large number of reactors in this country. >> ok. there was a story in the media that one of our naval vessels sailed through a cloud off of that?s -- were you aware >> yes. we did have indications that, in the early days of this incident, the reactor was going to reprocess that involves bending

steam that accumulates in the reactor containment structure. that's the needs to be released in order to reduce the steam needs tohat ven be released and ordered to reduce the pressures. >> going through that, would its have been avoided? >> that particular plume did not have doses that were particularly unhealthy. >> thank you. >> welcome. what intercity measures we require while you study the issue? in germany, they're taking in

terms steps right now as well as switzerland, china, venezuela. are there any steps that you would like to announce that you will take and ensure that our plants are safe? >> we continue every day to make sure that the plants are safe. at this time, we do not have any specific actions that we think are necessary to add to the safety of the facility beyond what we do. >> are there any interim advisory is that you will send out? 9/11, the government sent out some advisory's. >> there will be some informations summary that will characterize the event in japan. at this time, we do not have detailed information. of course, there are obligations within their existing licenses

and there are other measures of the talk about common types of strategies as well as the efforts that we implemented after 9/11 to put in place these systems and procedures to ensure that they could provide emergency cooling to the reactor if necessary. >> about the ap 1000 design, you said with your vote that, while it is clear that the shield building will provide an enhancement to safety, you're not convinced that such a design requirement exists? with what is going on in japan, would you consider that in order to consider adding that subtitle material as part of the process in constructing 81,000 plants? >> we will do it very thorough

review of the information from japan. we do not anticipate getting a final decision on that until the least the end of the summer. i think there will be plenty of information from our review to inform that decision. >> as you know, i of the legislation that required the dissipation of potassium iodide to residents living within a 20- mile radius of a power plant based on this study. we learned after chernobyl that this sheet medication can prevent cancers. the bush white house ignored my language into away hhs's par to complete the distribution guidelines. -- hhs's power to complete the distribution guns. do you think that the distribution of potassium iodide

to resident within 20 miles of nuclear power plants is a common-sense effort to? >> the particular protective actions issue for any nuclear power plant incident, hopefully there are responsible is at the state and local governments. they have the primary on the ground responsibility on how to deal with an accident. >> but you're the agency of expertise on the spread of nuclear materials. do you believe that it is advisable to look at a 20-mile radius for distribution -- >> the current policy of the commission is a potassium ideioe is and that could be considered -- >> the bush got line is that for 10 miles to 20 miles, people should just running or hide under their bed. is there a recommendation for new that they should look at potassium iodide in a 20-mile

radius. -- radius? >> there are many protective actions that can be made. >> i do not think they have the expertise in looking at the probable risk assessment and the likelihood of having k i there. should we be retrofitting reactors to ensure they can withstand much stronger earthquakes? the iaea wanted japan to years ago that their plans were not strong enough to withstand a stronger earthquake. should we be looking at retrofitting of the sentinel for a plant and other plants like it? >> the plan is largely designed to ground motion in the shaking that you would get at any facility. that is based on what we think are the most -- what are really

the maximum earthquake that has occurred in any particular area. it does not directly necessarily mean a 7.0 earthquake is what we think is a maximum credible earthquake. i think that is the appropriate standard for the agency. we'll look at all the information we have from japan. if we have to make modifications, we will. >> i just think that maximum credible earthquake would be reexamined after happen in new zealand, chile, and that earthquake zone that has yet to have an earthquake so that we have the proper protections. >> the gentleman from louisiana. >> thank you. i am a physician so i will speak about it and some lucky position. in effect, there will be a post mortem done on that accident. folks will go in there and see what went wrong and learn from it to ideally keep it from occurring again.

will there be people from industry invited to that video or only the academia and government? >> we have not decided how we will go about our review. but wanted to be systematic and methodical. in our normal practice, we always reach out to stakeholders, not just to industry, but public interest groups and other members of the public. i would expect them whenever we do as part of this process will have public involvement. >> when entered the nuclear power plant near my home -- when i toured the nuclear plant near my home, as i recall, there were looking for a fail-safe mechanism to keep the generators running even if there was something dire that happened to the plant.

i gather wood is happened here, if a tsunami because of diesel on the ground, it washed with the diesel and they were unable to run the generators. to reassure the folks here, my city, if you will, it seems that we have been proactive on the particular issue so that there is a back up to the back of to the back up to keep the generators running to pump the water in case -- you see where i'm going to. >> i do not want to speculate on exactly what happened in japan. we really just do not know. >> i am channelling in cnn right now. >> all the diesel generators in this country are considered vital to commit -- vital equipment. they are designed to deal to withstand the natural phenomenon. that would be hurricanes, tornadoes, it's an honest, earthquakes, whenever the natural phenomenon that is

relevant to the particular site. >> -- whatever the natural phenomenon that is relevant to the particular site. >> the backup generators to keep those cooling units running, we have proactively addresses this in this country and there is a way -- if hurricane katrina concerned it's my state, if one system goes up, there is another system to keep it running. >> that is right. each reactor has at least two diesel generators in the event that one of them cannot perform its function. in addition to that, many sites have what we call a station blacked out diesel or some other type of electrical power supply that can function in the event that those primary emergency diesel generators are not operating. all the plans in this country have been required to look at

presaging, other additional emergency equipment to deal with that of -- with this type of situation. >> you may have answered this next question. i was out of the room for a bit. clearly, we're talking not just a natural disaster, but man- made. do i understand that nuclear power plants have to be built so that, if there was a terrorist attack and an airplane was driven into it, it would still be protected? >> the reactors have been required to the will to deal with large fires and explosions that could occur at the plant. some of that was related to the possibility of terrorist attacks with aircraft. the new designs are required to be will to withstand an aircraft impact on the site. >> the containment structure,

even if there was a meltdown, how effectively can that contains structure keep it contained? >> that is the purpose of the containment structure. in the event that all of the city systems fail and we are not able to keep going to the court and it were to eventually have a significant fuel damage or some kind of meltdown, any radiological material would be contained. >> if there is a disaster, there is a disaster and it is in the contempt request that is in the design goal. that is the expectation. again, if that were to fail, we have airbus programs to do -- to do emergency evacuations. >> since they did from the 1970's, i assume we have more robust protections. >> we have looked at all these plans are the years. in the late 1980's and early 1990's, we did a systematic evaluation of the plants to see how to deal with these kinds of

very severe accidents. in some cases, the plants took the step of low-cost modifications that would deal with these more severe kinds of events. we have a lot of things that have been done. the plants are certainly not the same plants that they were when they were originally built and designed. >> thank you very much. >> the gentleman from michigan. >> thank you for your courtesy. mr. chairman, i am sure you are making a careful review of the events in japan. will you make such a review? >> we will, as we have a credible information. >> first of all, would you submit your plans to that, how

you intend to going in to ascertain what happened. >> we certainly will do that. >> would you also submit to as for the record how nrc will go about defining the events in japan and incorporating your plans? >> yes. >> does the nrc regularly use new information about the tip -- about the different types of risks? >> yes. >> would you provide for the record the process by which nrc assessment?isk assistan >> welle -- >> just for the record. i have a lot of questions.

>> ok. >> does the nrc's licensing standards take into account the risk of earthquake or tsunami? >> they are corporate all of the natural disasters. >> i would note with distress, you probably remember diablo canyon a few years ago, right on the fall, are you more careful about that than your predecessors were? >> we look at all the nuclear power plants in the country. we look at seismic activity from all of them. while not all plants are in high seismic areas, all plants experience some lower-level record activity. >> would you provide a list of the kinds of disasters for which nrc takes account of in terms

of its licensing standards? >> yes. >> it is my and standing that one of the main problems in japan has been in adequate access to emergency power to keep the reactor school -- to keep the reactors cooled. do the nrc licensing standards include adequate access to emergency power? are you satisfied that they do so? >> we believe that our requirements are very strong in this area. we continue to ensure that licensees have the corporate acquirement and that it operates successfully. >> you have an unholy mess on your hands, you and the department of energy, with regard to yucca mountain. is something like $17 billion

spent on this. this administration opposes going forward. some of it goes into cooling ponds. you have suggested dry cask storage. you have a long-term plan to address what to do with the infernal mess and how you will deal with the problem? >> right now, we're looking at a longer time frame for storage of spent fuel and we have at the past -- in the past. we believe that spent fuel certainly can be stored safely and securely with the existing system. >> but you do not have a plan for how you will deal with it. you're being sued by the electrical utilities because they are collecting monies from their ratepayers that are not

being spent for the purposes for which they're being collected. you have double the amount that you can store in a single pool. that is running out. you are running out of pools in which to store it. as these plants close, you will perhaps lose the responsibility of the persons who are storing this thing. the stuff just keeps piling up. is there a long-term plan anywhere in your agency, in the department of energy, in the office of the national budget, or any other office in the federal government about how we will deal with this internal mess? -- with this in formal mass -- with this infernal mess?

>> i believe there are plans to look long term. we believe that the existing systems -- >> the answer, my beloved friend, is no. i say this with respect and affection. you're sitting on a very fine mess that nobody knows what to do with and each and one of the situations offers unique opportunities for terrifying mischief to the broad public interest and to the people in the area. the cost of this whole sorry ass must keep going up. >> we agree with you, mr. dingell. how like to acknowledge the gentleman from texas. >> thank you, mr. chairman. mr. chairman, thank you for being here. yesterday was obviously a very long day for you. i appreciate you making yourself available to members on the

birth -- on both sides. recently, any mill has been circulating that suggested a much higher level of radioactivity at one of the plants that had been read -- than had been previously been reported? >> we're continuing to monitor the situation as best we can. i am not familiar with the evil you're talking about. we do believe that, with one of the fuel pools, there has been elevated radiation readings. >> when you say elevated, chest x-rays, cat scan, multiple cat scans? >> they would be lethal within a very short time. they are very significant. >> that is different from what we have been hearing before.

>> its is certainly more recent development that we have seen these high readings. >> your good to provide us with a written testimony. you're good to provide us with some updates on the situation that is a very fluid situation in japan. would you be good enough to give us in written form what you have described to us as you finish your prepared testimony this afternoon so there is no confusion over what -- when we " to reserve one way -- when we quote you? >> yes. >> to talk about the spent fuel pool being dried and the radiation being high. things were different from what i had been gathering from the

press reports prior to coming in here. it would be good to see that -- what is factual and oil is not. >> our information is limited. we have been careful to only provide information that we believe is reliable. >> we are here to talk about the budget. do you anticipate submitting an addendum to the request in light of the things that have happened this past week? >> that is something we will review at this point. i do not have an answer for you. i certainly will come back to the committee if we do. >> in a perfect world, what would be the percentage of this country produced by nuclear power? >> curve away, i would have to look, but i would take an estimate of about probably that

number. i am not aware of any significant plant outages right now. >> so the percentage of electricity produced in america would not increase over what it is today? >> i'm sorry. >> in an ideal world, this country maximizing all the different energy production possibilities that we have, what percentage would be nuclear? >> it is not a to us to decide that. i think the agency's responsibility is to make sure that, if there are no over-par plans in this country, but they continue to operate safely. right now, we're planning for the possibility of new plants to be under construction in the next several years.

with the but as we develop, we would have the resources we would need to handle the additional units. of theou're the king nuclear regulatory world, the full-decision-maker on the waste, what would be the ideal solution? what would you do? >> i can get too much into that because we do have an ongoing proceeding with regards to yucca mountain. the job of keeping plants and the material that we regulate state is a job that keeps me awake almost 24 hours a day. let somebody else worry about those broader policy questions. >> thank you for your activities during this crisis. >> the gentleman from pennsylvania. >> thank you for your patience and endurance today.

given what has happened in japan, this is a reminder to all of us that certifying new nuclear designs is a crucial and important task to make sure these reactors are durable and can be safely operated. i understand that the new certification process involves not only professional and accredited nrc staff, but there is also an aside, the advisory committee that oversees the review and recommendations of the nrc staff. >> yes. it is an independent advisory committee. >> ultimately, you and your colleagues make your own independent judgment, correct? >> wright. >> i want to address the situation to get more on the record about concerns raised by my good friend ed markey about the westinghouse 81,000. -- westinghouse ap 1000.

it was given due consideration by the nrc staff colleagues? >> i believe that they were. >> the members of the independent advisor a committee for reactor safeguards? >> as part of the review, they did specifically receive a presentation. >> you and your commission colleagues? >> i do not want to speak for the actions of all my colleagues, but i person met with him and talk to him about his concerns. >> what happened after dr. ma made his presentation? he raised these concerns. what happened after that? >> 8 the adviser committee looked at this perspective and

the king to their own conclusions. ultimately, no one disputes that the recommendations that he had would make the design safer. but we think that the design, as it is right now, would appear to meet our standards. but i would add that it was mr. ma who raised concerns with the previous iteration of the design. as a result of those concerns, the agency did indicate to westinghouse that significant changes would need to be made. they did in fact make significant changes. i do not want to speak for him directly, but minor stemming of his position is that he thinks those changes are not necessarily enough to satisfy the initial concerns. >> but it is true that his concerns were put forward and the nrc team of reviewers, throughout these drafting, they

evaluated it and over world his concerns. as did the subcommittee. this one through a process. i want to make -- i was to make clear for the record that there was concerns and there were address. >> i feel strongly that we created an environment in the agency that people can raise those concerns and they can be thoroughly reviewed. i believe, in this case, that that is what happened. >> thank you. >> the gentleman from nebraska. >> thank you for being here. two power plants, mr. barton talk about one in georgia. but there's one in georgia, one in south carolina that sometime this year or earlier next year should be issued their combined

construction and operating license. first, are there any discussions occurring to delay that col because of the japanese disaster? >> those two plants or potential plans that you reference are based around the ap 1000 design. a design is currently undergoing a public review process. i expect we will get comments as a result of the public process related to the situation in japan. we will evaluate those as we get them. >> so that is yes and maybe no. >> at this point, we have not done -- we are following our normal path with the reviews of this point. >> all right, it sounds like there may be some uncertainty in the process. so we will get the combined operating license in 2011 or

early 2012. >> we are going down the path of -- >> there is no reason to repeat, sir. i am curious of the other applications made for the early site permits. you know how many are sitting with you? >> we currently have one or two new early side permits in front of the agency. >> are there any that have been provided an early site permit and are ready to proceed? i just want to know how many are in the pipeline. >> we have four applications -- we have applications in front of us for approximately 20 reactors. some of them are combined applications. then we have two early side permits that are not tied to an actual license for a plant.

>> i have studied the lot the small modular reactors. i want to know what your personal opinion is, where the process is in reviewing the technology, how close we are to ruling out a pilot project. >> i like to think of the small modular reactors in three groupings. we have the small modular reactors that are very much based on existing types of reactors that we have now, but smaller. for that type of design, we would anticipate, in the next year or so, and application for the construction of a small modular reactor. we also expect one or more applications with designs related to the smaller reactors.

there is a slightly different technology. it is tied to the next generation nuclear plant project. that is an activity that is a little bit farther away, maybe 2013 when we will see an application. there is the least certainty within the non-traditional reactor types. those are what i would call in the conceptual stage. i have not progressed the point where we have detailed discussions about possible reviews of applications. >> i appreciate that. i yield by 59 seconds back to the chairman. >> the chair recognizes the gentleman from louisiana. >> thank you, mr. chairman. i appreciate you being before our committee. i know there are some votes on the house floor so i will try to

be brief. the secretary indicated that the united states helped japan doing some testing on contamination on the ground. you remember what type of tests are currently being done and have you found anything? >> when standing is that we are working to provide -- my understanding is that we're working to provide reading of air variation. at this point, i am not sure the origin of that, whether from the u.s. assistance in japan or directly from the japanese. >> i would imagine there are a number of applications that are pending before your agency at various levels, awaiting decisions. do you anticipate it will go for the current pace? >> right now, we have no intention to change the approach we're taking. as i said, we will do a very

systematic and the thought will review of the information coming from japan. if there is information that will require us to revise our approach, we will certainly do that. >> as with any crisis, there will be an evaluation in general just to see what lessons can be learned and i would imagine we will make sure that, if we learn some things from how they did things right and how they did things wrong, if they did, we can incorporate them. just do not move for or retreat from energy production this country. >> i do not want to prejudge what comes out of it. if we get information that tells us we need to make a change, we will. if information tells us that things are good, then we will proceed as we are. >> ok. >> i would like clarification. you talked about the small

modular or three or four existing categories. what determines what category a design would be in? is that based on actual applications or is that just general knowledge? >> it is the state of readiness of the designers and the vendors themselves. >> the readiness of the vendors. ok. thank you. you have anything else? >> i would like to know, if in fact, over the last five years, can you furnish this committee infractions or violations or

emergency conditions were the nrc had to send an emergency crew within the continental united states? >> we can certainly send you that. >> i want to know what level of responses and what level of missions you have dealt with over the past five years. >> we will send you that if permission. >> thank you very much. mr. rush, you have three minutes. >> mr. commissioner, thank you for your time today. we appreciate it very much. we look forward to working with you as we move forward with nuclear energy and safety and i look forward to future opportunities. >> thank you. >> the hearing has ended.

>> the house financial services committee and the creation of

the new financial regulatory agency. from the nuclear -- than the nuclear committee chairman speaks. later, china's premier hold a news conference in beijing. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> to mark, joe walsh on fedele spending and the economy. -- tomorrow, joe walsh on federal spending and the economy. "washington journal begins live at 7:00 a.m. eastern on c-span. >> the president and the administration believe that we need to look closely at the events in japan. we have to applaud whatever lessons that can be and will be learned. >> energy secretary steven chu on nucleaand jeffrey jaszco spoe

on capitol hill today. >> this weekend, likely gop presidential candidate herman cain on the economy, the spiraling downward of america, and whether he will run for the republican nomination. >> i put my toe in the water. it is now up to my neck. the feedback we have gone from people across this country, tens of thousands, they are willing to volunteer. >> that is this sunday at 6:30 p.m. and 9:30 p.m. eastern and pacific. >> elizabeth warren has been named by the president to establish the new consumer protection bureau. this agency was created in last year's dodd-frank financial

regulation bill. this is two and a half hours. >> i would like to welcome her and thank her for her participation. she has made a request, because of scheduling issues -- she will be in the hearing until 12:30 p.m. we want to respect that. we will have a good and vibrant hearing and plenty of time to do that. the didebate on the creation of

this program was marion tense. there were lapses and oversight and inherent problems within the regulatory structure. that said, many of my colleagues in the house of a representatives have serious concerns about the creation of a new bureaucracy without oversight. what consumers need is a regulatory structure that allows them to obtain information on a variety of financial products and then make an informed decision about which products best suit their financial needs to and from reading the fine -- reading the professor statements, she will be addressing those issues. consumers could start to lose the ability to choose from a wide variety of products. it would be better for all parties if a portion of the

bureau's budget were a part of the annual appropriations process. oversightcongressional o is present, i do not think it is the most effective way. i have questions about the role that the staff and the bureau are playing in ongoing rule making. it has come to light that representatives from the bureau have been playing an active role in settlement discussions between large mortgage servicers, federal regulators, and state attorneys general. by statute, the bureau will not be operational until july of this year. the involvement of bureau employees in this discussion raises some questions. i realize time is limited. like to thank professor warren for being here today and her willingness to meet with some member -- with so many members of the congress. i appreciate that very much.

i would like to now recognize the ranking minority member, the gentle lady from new york. i will scoot out very quickly, but i will be back. >> but not before i thank you for calling this hearing and for your friendship and your leadership on so many important issues, including this one. thank you and welcome to elizabeth warren who has been at the forefront of the effort to create a consumer bureau for years. thank you for your service and for your commitment. to all american families. you have been a true champion for the american consumer and for -- i am getting reports from all sections, from all stakeholders in our financial community that you have reached out to them and you have been fair and balanced in your approach. history has long shown us that our country is at its most secure and its most prosperous when the middle class is

economically vibrant and growing. the recent history has also shown as that the reverse is true. although it is hard to come by an exact figure, in 2008, the worst year of the great recession, household wealth in america fell by more than $11 trillion. let me repeat that stunning figure -- $11 trillion. and the middle class, by any and reasonable measure, has borne the brunt of the -- by any reasonable measure, has borne the brunt of the economic collapse. they have lost their jobs, their homes, the chance to go to college, and their hopes of a better and brighter future. that hard inescapable fact was one of the most compelling reasons for the enactment of the bill and the creation of the consumer protection

bureau. we take steps forward to create a level playing field for the american consumer and the middle class. for far too long in our financial system, regulatory concerns about consumer protection came in at a distant second or a third or was not considered at all. but now, for the first time, anyone who opens a checking account or savings account, anyone who takes out a student loan or mortgage, anyone who opens a credit card or takes out pay-day loan, it will have someone on their side to be fair and balanced and to protect them. for the first time, consumer protection authorities will be housed in one place with an independent appointed director, an independent budget, and an autonomous rule-making authority. for the first time, a truly independent authority will be able to write new rules for non-

banks, financial firms, including paid estate lenders, debt collectors, mortgage brokers, -- including pay-day lenders, debt collectors, mortgage brokers, and other lenders. this kind of evenhandedness and common-sense oversight of our financial system with strong consumer protections will insure the safety and soundness of the system as a whole and is clearly in the best interest of the american consumer and the driving force of the american economy. elizabeth warren has been at the helm since september, 2010. i will be -- i am interested to hear how the process is going and what the initial parties will be once the authority is

officially transferred in july. thank you. >> welcome, a professor warned. i would just like to make a couple of observations. a number of people in the regulatory community and a number of economists have raised concerns about some of the unintended consequences of the titles in dog frank -- in dodd frank that was not really thought through. title 10 seems to be particularly problematic and i will explain some of the concerns. beginning july 21, the federal reserve has to transfer to the bureau what ever funds the

bureau's director has requested, despite the fact that neither the fed nor congress will have any say into the bureau's budget. that is unique. that is one concern that has been raised. as a byproduct of that, it really raises two problems. first, this agency will be able to act outside of the normal appropriations process in the way that dog frank said it appeared that means it will not be held accountable for the -- in the way dodd frank set it up. that means it will not be held accountable in our regulatory structure. we tried this model with the gse's and it did not work. former heads have said that that competing regulatory structure will fail vs hud and contribute

to the failure of fannie and freddie. instead of abolishing the model, we have replicated that regulatory model throughout the financial system. that gives cause for all of us to ponder whether this was done correctly. the final concern i have is the assault on -- i think we should all be able to agree that one uniform standard is much simpler, much more effective. we already have 97% of the lawsuits in the world today, encouraging more litigation and more uncertainty in this. i just think dodd frank takes a major step back. banks' subsidiaries will now have to comply it with laws

instead of one national uniform interpretation here. i think -- it will do little to protect consumers are make our capital markets more competitive i hope this committee will take the next necessary steps to correct these failures. we now go to mr. scott of georgia for his comments. >> thank you very much. i appreciate that. welcome, ms. warren. i think that you have a delicate balance. on the one hand, if you have to make sure that the consumers have the proper information to educate them about some of the practices in our financial services industry, but you also have the requirement to make sure that what you do will not

thwart access to capital. for our consumers, for the banking community, and for small businesses. well at the same time, give the confidence to day that you will also protect the american consumer. protect access to capital. i would also like for you to address what impact my good friend on the other side of the aisle representative -- on the other side of the aisle has a bill. that bill basically 62 defunct -- seeks to defunct and keep you in treasury. i would like to address what this means to you. how will this make your duties better or make your duties worse?

finally, i would like for you to address concerns of the banking industry. the banking industry is scared to death of this. they feel this is a threat. the banking industry is the hearts of our economic system. it comes to the money -- pumps the money throughout our system. it might be good for you to address that. to ease some of the concerns within the banking committee that you are not the threats or the evil empire that some of them might think. this is a very timely hearing. you do have a delicate balance. i hope that you will address some of these concerns. and that we all will be this hearing far more weiser and more confidence than europe -- in your ability and the operations

of this new bureau. it is not a threat, but a much needed solution and approach and a very trying economic times. i yield back the balance of my time. >> thank you. director warren, you are probably directing the most powerful agency that has ever been created in washington. it is not a commission, it is one single person. it will regulates all providers of credit, savings, pavement and the consumer products and

services. covered persons is to find that any person who engages in offering more providing a financial product or service. the definition of financial service, you will define what that is. it is not defined in the statute. also, you will have the ability to identify any financial products or services that is deemed unfair, deceptive, or abusive. there is no legal definition of abusive. you'll have the right to make that determination.

as $500ave as much million from the federal reserve available and you can seek appropriations of $200 million more. that compares to the cftc, which has 169. the sec has $900 million. i will start by saying that no one questions your commitment to consumer protection. i want to acknowledge that. as you'll make the decision to when consumers are protected and when they are not and what products will be offered and which products won't. you'll have quite a budget. you've not been nominated by the president. i did not know when that will happen. or whether he will be nominated.

we asked secretary geiger and september and he said that nomination will be made soon. six months later. i think you would like denomination to be made. no one is getting confirmed by the senate. yet, you have a lot of discretion and a lot of power. i see very little accountability. we have to almost rely on just a good-faith reliance on your abilities and integrity and judgment. that is quite a burden for you and quite a burden for us. i think it adds to a great deal of uncertainty. i look forward to hearing your testimony. i will tell you that since last july, but we passed dodd-frank,

i have advocated for a commission all along. i believe that having a board is a much better approach. i think it is asking one person to do too much. thank you. >> two, mr. chairman. -- thank you, mr. chairman. >> when cfpb was debated, we were concerned that your agency would have a lot of power with very little congressional oversight. we were concerned that severe economic consequences would arise from the separation of consumer protection and safety and soundness duties. while that question was before us in theory, it is now in front of this in a very real way in the form of a recently released mortgage servicers settlement term sheet. our economy is still very

fragile and the recovery in the housing market will play a big part in getting our nation back on its feet. a number of the provisions of the term sheet could cause a crippling slowdown in that recovery. i looked forward to speaking with you about this and i appreciate you holding this hearing, chairman. >> thank you. i would like to recognize mr. pierce from mexico. >> your new agency is going to wield a lot of power. the basic problem is that we are spending $3.50 trillion a year and our revenues are $2.20 trillion a year. our economy is frozen in place, the recovery is stalled out by regulations which are causing uncertainty. the health care regulation is causing people to lay off employees to get below caps.

it is freezing the medical creation of jobs in the field. we city regulators freezing loans. banks have the money to lend and they are afraid to lend it. i would be interested to hear what you are doing to unfreeze the market to create certainty. with that -- without that, our economy is doomed to fail if we continue on the path that we are on. i look forward to talking with you. >> welcome, ms. warren. the borough would be a self regulated governed by one individual and funded outside the congressional appropriations process. the zero promises rules to -- this bureau promises to regulate

all products available. all financial firms will be subject to its regulatory authority in some way. all this power is given with little no mechanism for overseeing. as a former bank regulator, i am concerned that this -- in a time and we are seeing the signs of recovery, blasting our lenders need now is for an intrusive one size fits all government regulatory agency submitting more regulation to them. i yield back. >> thank you, madam chairman. i think all of us on the panel are concerned about consumer protection. we cannot let theoretical consumer protection be the vehicle for categorically eliminating consumer choices or

for prohibiting new customized for sophisticated financial products. doing so would not protect consumers or jobs. the question comes down to who makes the best decisions about financial products? at both the state and federal levels, we already have countless relevant law, regulation and regulators. do we really need to superimpose another multi-billion dollar bureaucracy on top of the pre- existing legal infrastructure? if so, shouldn't new bureaucracy at least be accountable to the american people? shouldn't congress give the new bureaucracy more guidance than relying on an abstract concept?

ensure that this bureaucracy never jeopardize his bank safety and the name of consumer protection? i hope that we will reflect on whether any theoretical bureaucratic benefits justify the risk that this new bureaucracy poses to consumers, to jobs, and to our economic growth. thank you. >> i would like to recognize mr. canseco from texas. >> thank you for being here today. the consumer financial protection euro seems like a good idea. an agency is mission is to protect the consumer. unfortunately, like so much else within the dodd-frank, the unintended consequences continue to come to light. it turns out that consumer protection really means consumer

restrictions. having the federal government restrict the choices available to consumers in the name of protection since a terrible precedent. professor moran has -- if there is no greater advocate for families that a husband and wife sitting down at a table planning at the family's finances without government interference or oversight. there is no room for a third seat at that table. one occupied by a faceless bureaucrats who does not even know their names, much less what is in their best interest rate american families deserve the dignity of being able to make the financial decisions by themselves. decisions about credit cards and mortgages belong to the family at the family table, not a washington bureaucracy. i look forward to your comments.

>> thank you. that concludes our opening statements. i welcome the professor back. i look forward to hearing her testimony. thank you. >> thank you. thank you for inviting me to testify. this is the first oversight hearing for the new consumer agency and i welcome it. i hope you will permit me to begin with a personal note. i did not come to washington because i yearned to be a government official. i came to washington because congress passed a year. i first job started 2.5 years ago when i was appointed to the congressional oversight panel, where i served as chair. at the oversight panel, which worked to reduce -- produce reports for you about tarp every

single month. during that time, i came to capitol hill on many occasions to testify about our oversight and to answer your questions. you schools meet early on the importance of oversight and i believe in it. since taking the job of putting together the new bureau, i have had more than 60 one-on-one conversations with members of congress. i have saw your good council on many issues. for today's hearing, i have prepared a 34 pages of details and testimony to document our startup efforts. the testimony describes our vision for the new consumer euro and the progress we have made so far. i hope it is helpful in guiding your oversight efforts. the consumer out -- is straight forward. make risks clear so that consumers can compare one product to two or three others.

fine print is great for those who want to hide something. but not good for families who want to know what they're getting into. mortgages, credit cards, checking accounts, america's families have a right to see the deals right up front. there is another issue that i know many of you are concerned about. i would like to address head-on. the department of justice has been coordinating with federal agencies and 50 state attorneys general to review and address these decisions. last month, this country's chief banking regulator came to congress and said these deficiencies have resulted in a violation in state and local foreclosure laws. they have damaged mortgage markets and the u.s. economy.

as you know, this new consumer agency is still getting started and. we will not be a party to any formal settlement with mortgage servicers. however, later this year, the bureau will receive the authority to set standards for the mortgage servicing industry. for this reason, secretary geithner arent, the justice department, and other agencies have requested the consumer agency provide. we have provided our comments and let me tell you why. it is very -- if there had been a cop on the beat with the authority to hold mortgage servicers accountable, a half- dozen years ago, if there had been a consumer agency in place, the problems in mortgage servicing what had been exposed early and fixed while they were still small. long before they became a

national scandal. the mortgage servicing problem illustrates the importance of fair, consistent enforcement. we need a cop on the beat that american families can count on. it is critical that we get this right. a real cop on the beat. right now, our government is trying to hold down a settlement to end the scandal. this is a law enforcement matter. it includes a bipartisan roster of law enforcement officials at several agencies, at the department of justice, and 50 state attorneys general. while live would be inappropriate for me or for anyone else in government to disclose the substance of the discussions regarding an ongoing enforcement matter, i do want to say that i am glad that the consumer agency has been able to provide assistance in this important matter. i think congress for creating

this agency to help provide a voice for american families. that is why we are here and that is what we are doing. thank you. >> thank you, professor warren. i will stop the questioning. we will go through the various members. in reading your statement am looking at the goals for the euro -- bureau, you have mentioned repeatedly going back in and looking at old direct elections, removing old regulations, and determining which of those are obsolete. as i was reading, i could not see where that was an effort that is moving forward in terms of weeding out and regulatory reform with the existing regulations. can you give me a brief update on where you are with that particular issue? >> i really am glad that you ask

this question. it permits us to talk about not just our overall -- we have reached out to community banks, credit unions, financial industry, people across the spectrum to try to learn from them. where the regulations are most problematic and we have settled on our first priority for this agency. to take two forms, one is called -- these are forms -- you may remember the last time he bought a home. somewhere in the stack of documents that you dealt with, these are two forms that committee bankers tell me have roughly about and 80% overlap in

terms of the content. they are written differently. they have different pieces to them. as a result, they are expensive to fill out. they have regulatory compliance costs. there are real regulatory consequences if they did something wrong. in several meetings, i of that committee bankers come to me and show me these forms. show me what it is like and how much time they have to spend. what we have proposed to do at the consumer agency, to bring those two forms together. you would think that would not be a hard thing to do. because financial regulation has been scattered among several different agencies, at this

particular one has been held by two different agencies and there has been negotiations for more than in years to try to merge those two forms into one. now they're both coming to the new consumer bureau.. we are now able to work with the community banks and credit unions. we are going to put those together. what we are looking for it is a one-page mortgage shopping sheet that is easier, shorter. lower regulatory costs, higher value to the consumer. we regard that as the sweet spot in this agency. >> i am interested in your response. you mentioned more than a few times community banks and credit unions operate in creating this agency, those entities were led to believe that they would be exempted from the purview. in your comments, it nullifies

that impression. you are going to import ideas. i applaud that effort. having bought homes before, it is very confusing. we all know that. you are backing up what might committed to a banker -- what might community bankers said. he is already had to hire one person in a community bank to meet these challenges this is a question that goes to the heart of the overreached or exempting the is community banks that do not have the $10 billion level. they are a part of this. in terms of the service issue, we addressed that a lot and our opening statements.

the real question is, this agency does not go into effect until july. are you really a cop on the beat? kenya perform as a cop on the beat when you have not had your training yet -- can you perform as a cop on the beach when you have not had your training yet? >> thank you. i would like to ask unanimous consent to place a new record an article that was in the wall street journal yesterday. >> without objection. >> thank you so much. the dodd-frank has a slew of

checks and balances. it is accountable to the american people and congress. could you identify some of those and go through some of those checks and balances? >> thank you. i want to start by making a point about accountability. i came here originally because congress passed me to be part of the effort to oversee tarp. i hope that every time i talk about accountability, we are also talking about the accountability of financial institutions. that there will be someone, a cop on the beat to make sure that they follow the law. in terms of accountability, let me remind everyone the structure of this new agency. it is the only agency in all of government was rules can be

overruled, obliterated, negated, by other agencies. the structure of dodd-frank is to make this the one agency or other agencies can come in and say, we do not like that rule. we're not going to prevent that rule. that is not true for any other agency. the second thing is to focus on banking regulators. in case of banking regulators, the throughout america's history, it has been the case that banking regulators are funded outside the political process. they have always had independent funding. the consumer agency, the one voice for american families,

should have that same independence. the reasons for making banking regulators independent is very obvious. given the way it that the process works. i will say in terms of the unlike any of the other banking regulators, the consumer banking regulator will not be able to set its own budget. its budget is capped by statute. if the consumer agency thinks that it does not have enough money to put enough cops on the in order to supervise the lending industry, the agency has to come back to congress and ask congress for more money. that means that in this respect, the consumer agency is not the

strongest agency in government. it is the most constrained and the most accountable agency in government. i should also note that in the overall structure of dodd-frank, there are about 18 federal statutes that have bits and pieces and chunks of consumer financial protection. currently, those 18 statutes are scattered among seven different federal agencies. seven different agencies about responsibility for enforcement in different bits and pieces. most critically, for no agency is a first importance. what dodd-frank provided was to

say, we're going to take existing block and we will gather it up and instead of having the conflicts, the inability to be able to negotiate and get a simple form, we will sweep of that inefficiency out. we will concentrate on exactly one agency that will be accountable on consumer issues. there are many more pieces. i apologize long. i think the issue of important. i wanted to hit the highlights. thank you. >> i would like to recognize the chairman of the full committee, mr. bachus, for questioning. >> thank you. professor warren, you have participated in the foreclosure settlement discussions with the banks. you have the knowledge that

earlier. >> congressman, let me put this clearly. we have been asked for advice by the department of justice, by the secretary of the treasury, and by other federal agencies. when asked for advice, we have given our advice. >> you do that as the -- advice from the consumer and financial protection board, where they consulting you in that role? what role were they asking when you say we were asked for advice? >> right now, we are part of treasury. we are just a division. >> the cfpb. when you say we are -- >> the standing up of the consumer agency. >> so you were asked, in your role as the --

>> as part of treasury. the first request was specifically from secretary geithner. >> he ask you for advice on what to do it? -- he asked for advice on what to do? >> he asked for advice about the ongoing problem we have with the mortgage servicers do have violated both state and federal law. >> these are criminal enforcement procedures? >> it is my understanding that what the department of justice is dealing with -- i do not know whether they are criminal proceedings involved. >> have you sat down and talked with the justice department about these enforcement actions? >> the justice department asked for our advice. >> our being the cfpb?

>> a section of treasury. >> a section of treasury. do you envision yourself as the acting director of this agency? >> no. there is no acting director. >> so you envision yourself as just the political adviser to the president? >> i have two jobs. i have a job as an assistant to the president, and then the job that is the 14th an hour a day job, and that is the special adviser -- special assistant to the secretary of the treasury for the purpose of starting the consumer financial protection program. >> have you discussed with secretary geithner or with the president and nomination -- who should be nominated to head this agency? >> in the course of my work in trying to get this agency going, i have had many

conversations with secretary, with the white house, and with others about the qualities of what might be needed -- the qualities of the person who would run his agency. >> have they told you when they may make a nomination? have you urged them to make the nomination? >> i have tried to make it clear that it is important that we have an nomination. >> and that it began almost immediately? >> i would not want to describe any conversation in detail, but i am aware of the need for urgency. >> have they given you any indication -- what if they made a recess appointment and that appointment was you?

would you except that? would you say i would rather not have a recess appointment, knowing the ball back from that? -- blowback from that? >> congressman, there is a process in place. i have tried to contribute what i can. i understand that there will be nomination soon. that is all i know. >> the setting mortgage servicing standard. you had engaged and given input and advice into does. is that correct? >> when we were asked by the secretary, by the department of justice and others, we have given advice. >> thank you very much. >> we go now to mr. gutierrez of illinois. >> thank you so much for coming before the committee this morning. i wish you godspeed in your

endeavor. i find it interesting we're worried about how is this is going to become a permanent nomination to head the agency and what is going on within the service there's any different departments. fightk we're going to that is a theme that will be carried out most of the morning and continued at -- we're going to find out that is a theme that will be carried out most of the morning and continued the next couple of years. i am really concerned about consumers and not the financial institutions because i have a funny feeling that if we carded everyone sitting behind you, banks and investment bankers and pay lenders. i do not know how many family budget makers are very well represented out there.

i am not too worried. as a member of congress, i can assure everybody that those from financial institutions are ready, willing, and able, and always have been. they have sometimes had an overwhelming voice here. i would like to ask you, when we did dodd/frank, and i want to make this clear, are you able to supervise car dealerships? >> no, we are not. we will not be able to do that. >> and that is expressly prohibited in dodd/frank? >> yes. >> i just wanted to make clear that for those of us here while we create your agency, the financial institutions, including the car dealers, got their take. they got to be taken out. as i sit around my family table, i assure you that they were here.

the banks were here. goldman sachs was here. the car dealers were here. the pay lenders were here. they were all here. let me tell you, they were extremely too successful. let us not be too sympathetic about the port corporations. -- poor corporations. i am more concerned about the people at the dining room table. it seems incredible to me. before i bought my house, the greatest financial investment i had to make was buying a car. i think that for a large portion of the american public, it will be the one instance -- for all of us, unless there's something different about you all, it is a scary proposition, buying that car. it is rife with lots of danger,

especially financial exposure if not done correctly. i am sorry that i am not too worried about them being here. we created the consumer financial protection agency last year to protect consumers from unfair, deceptive, and abusive practices. also, to create transparency and fairness for consumer financial products and services. some people would argue that we already have federal agencies that serve as regulating bodies. can you describe how it is that the consumer protection bureau is different from regulators like the federal reserve and the office of the comptroller of currency? >> yes. i think the big difference is about what people want to do. the fed is a traffic agency -- terrific agency. it does a lot of things. but the people who go to the fed go to the fed because they want to do monetary policy. that is how they are evaluated by congress.

it was chairman frank, two years ago, who made the point that in 20 years of reports from the fed, the question of consumer protection never came up. what this is really about is saying that those powers that had been with the fed will now move to a new consumer agency. there will be someone who will act as a cop on the beat, who will be out there to look at how mortgage servicers, to pick an example out of the headlines, are executing on their obligations, whether or not they are following the law. someone there to watch. and someone to make sure and be able to say to the american people, no matter how big you are, you have to follow the rules.

the laws are the laws. the office of the comptroller of the currency has done a lot of different kind of work, but principally they are on the work of prudential regulations. they have watched out for how they can protect the financial institutions. the difficulty has been that inattention to consumer issues, to consumer products like the kinds of mortgages that make it into the system over the last 10 years, turned out not only to be ruinous for american families, it was also ruinous for american banks. again, the idea that congress had was to say, let us take this functions and move them to the new consumer financial protection bureau, where we have a cop on the beat who make sure there is someone who is going to enforce the law. if we had had this agency six

years ago, eight years ago, we would not be in the mess we are today. >> if i could interject here, it is also government intervention. perhaps if we had restructured this agency, but if we also did not have the temerity to believe that congress should go in and muffle the market and get down payments down to zero, if we had not had the temerity to pass the gse act and allow government sponsored -- a government sponsored enterprise to go in the business of arbitrating and over leveraging it 100 to 1. there are a number of factors, and some of it is because of congressional intervention in the market and because congress

tied the hands of the regulators. i'm talking about the safety and soundness regulators. i witnessed all of that. i think that there is an additional consideration here. part of that is the idea that washington can better understand what the consumer demands are then the consumer. i will give you one example. it was overdraft protection. the presumption here is americans do not want overdraft protection. they do not want to pay for that. they will all have to opt in for that. what did we find? we found they all opted in. overwhelmingly. yes, people wanted that. the presumption here was that that was a waste of time. i just think the idea that

government will dictate the market on a willing buyer and seller -- it is a consideration, as is the consideration of the fact that your agency is going to be able to act outside of the normal preparations process. that is unique. that is new. the idea that it will not be held accountable for the actions it takes in terms of the budget. my main concern is an additional one. this i have shared with you. it comes from putting safety and soundness protection behind consumer protection in the regulatory structure. we tried that with the gses. everyone has a right to own a home. and congress interprets that right to meet it if you do not have any down payment, he should have a right to own a home, why are the down payments

not zero? why not mandate with a goal through hud that this has to happen? we do that, and we said at a bifurcated regulation where hud is driving the gulf, and on the other side you have the prudential regulated that was supposed to be regulating for safety and soundness. guess what. they could not step in and leverage the portfolios because the first consideration was not safety and soundness. we set this up so the first consideration was not safety and soundness. having gone through this, this is my issue. we have tried bifurcated regulation. we have had the regulators, current and past, who had this particular responsibility, both

dallas this helped create the collapse of the housing market. -- both tell us this helped create the collapse of the housing market. had we had a single regulator, it would have been better. all of us have heard this debate. i just wanted your take on that. >> thank you, congressman, i think this is a really important issue. the point about safety and soundness also goes to the point about dictating products. i want to be really clear about the vision of this agency. what we are about is making a price clear to consumers, making risks clear to consumers, making itself families have a chance to compare two or three credit cards. the figure at two things. can i afford this thing, and have i gotten the one that is best? i think congress was very cautious on your point when it set up the new consumer agency.

>> i'm going to interrupt you. i had an amendment that would make safety and soundness the first priority. it would have the credentials regulators sign off on that. the majority opposed that a minute. we were not that cautious. the mmm -- amendment was not accepted. >> you do remember the way it was set up, the other banking regulators, the safety and soundness banking regulators could overrule -- >> they had a very high threshold, as opposed to -- i have given you the example of what really happened. it could happen again. it is likely to. >> i think this is why the consumer agency was set up so that its rules of whatever promulgates, can be overruled by a combination of safety and soundness regulators, something that exists nowhere in government.

i should say because i think this is important. for families to know the price, for families to know the risk -- >> we have no disagreement on that. >> i appreciate that. i know we have had good conversations on that. >> we are going to go to mr. watt of north carolina. >> thank you mr. chairman. i yield 30 seconds to the ranking member to clarify what is going on. >> i think we should all continue to clarify that the cfpb, any action can be overruled by the financial stability oversight committee. safety and soundness is their top priority. any action that the cfpb rights into their statute can be overruled by the financial stability oversight committee. i wanted to clarify that.

i yield back. >> very high threshold. two-thirds vote. i just want to continue. >> i am happy to the gentleman. >> point of order. as one of the junior members on this, i am concerned about the allocation of time. he just made a five minute injection. >> good point. >> i think he identified himself for that five minute injection. he never yielded himself time. i assume that -- >> i ask for unanimous consent that the gentleman may have additional seconds. >> we are going to go to mr. watt. go ahead with your question. >> that does not compensate me for the time that was lost. 30 seconds does not compensate me. >> take your time. >> i appreciate that.

let me welcome ms. warren here. thank you for being here. i want to start by, and i'm getting a copy of this speech that you delivered to the financial services roundtable. i'm going to put it in the record. i was there. i thought it was one of the most thoughtful speeches i ever heard given to a group that came into the room with an adversarial nature. they walked out of the room feeling a lot more confident that none of the horror stories or horror possibilities that had been postulated and tossed

around rhetorically in the political context were about to happen as a result of the passage of dodd/frank and standing up of the consumer protection bureau. i want to compliment you. i came the that very night and complimenting you on the speech and asked you to send a aye -- i came to you that very night and complemented you on the speech and asked you to send me and a number of the financial service people in my congressional district a copy. when they have raised concerns, many of the same rhetorical concerns were raised. i want to compliment you again on your presentation, the 30 pages that you have given us that outlined how this agency is being stood up. i want to recommend to my colleagues, particularly in light of the debate that we had

yesterday and the day before about how the consumer financial protection bureau has no oversight, i want to particularly recommended them pages 18, 19, and 20 of miss warren's testimony. these outlined, in detail, the amount of oversight that this agency has been given that far exceeds any oversight than any other financial regulator has, including the point that the ranking member just made, that any rule that this agency promulgates can, first of all, be reversed by this oversight board, and then second of all,

if we are not happy with them, we can reverse them ourselves as we can do with any other financial services or any other regulation that is promulgated by a federal government agency. with that, my time is waning. i do not know how much time i have. >> you have more time. >> i do want to ask unanimous consent to put into the record the speech that was delivered to the financial services roundtable leadership dinner by elizabeth warren on wednesday, september 29, 2010. even with her personal note to me saying, with thanks from miss warren. >> without objection, it is included, including the personal note.

>> i want to commend that to my colleagues. if that does not send them at ease -- i am probably undermining your credibility with the consumer groups out there, but i am speculating that at the end of this stand- up, it may be the financial services industry that is the biggest advocate for ms. warren to be the head of the consumer financial protection bureau because of her approach to these very tough issues. streamlining regulation, getting down to simple forms -- the kinds of things that both sides of this committee have advocated and have been the primary focus of advocacy of my republican colleagues on this committee.

this is not an ogre, a stand-up person, nor is it an ogre consumer financial protection bureau. this is an important ingredient for consumers in this country. i regret i did not have a chance to ask you any questions. i am just advocating for you. >> we go now to mr. mchenry for his questions. >> thank you, mrs. warren, for being here. i understand your political point -- >> would the gentleman yield for just a second? >> and -- >> just so i can be clear that this is in the record. did i get unanimous consent? >> you got unanimous consent. >> ok. i am sorry. i ask for unanimous consent for the gentleman to have 30 additional seconds. >> you are a political appointee in the white house, and you are a political appointee in treasury. i want to go through a scenario with you, just to get context for folks on your position.

walk with me here. this is more of a mind exercise. i want your judgment on the merits of this. it is shortly after the enron scandal. let us rewind. the justice department has a special task force to go after ken lay and enron. would, in your opinion, it be inappropriate for the white house assistant to the president to call up the attorney general and get advice on how to deal with the enron matter? >> congressmen, as best i remember following the enron scandal, the justice department asked for advice from a number of specialists. >> did they ask karl rove? >> -- outside of government.

i am not sure. i do know they called my teaching institution. >> that is different. we're talking about a political appointee in the white house. i'm trying to see if you understand why the position you are currently in is controversial. do you have an understanding that you are in a unique position, the fact you are a political appointee, you have not been confirmed by the senate to have this institution that you are directing, you have no statutory authority to engage in these matters that you are engaging in -- do you understand why this is controversial? it is similar to karl rove having a similar position in the white house. if he injected himself on settlement matters like this, there would be a hew and cry. do you understand that this is

a bit controversial for folks? >> congressman -- >> yes would be a good answer. >> i work for the secretary of the treasury. in my work for the secretary of the treasury, i have begun to help put this new consumer agency together. we have tried to build already a lot of expertise on a lot of different issues, on credit cards, on mortgages, and on credit reporting. when the secretary of the treasury came to me and said, we would like your advice, i was glad -- >> don't you answer directly to the president as well? >> when the president asks for my advice -- >> yes or no. do you answer directly to the president? >> i answer when the president asks for my advice. >> ok. it is in your title. i am trying to make sure you have an understanding of the magnitude of the challenge

faced on your unique position. under what statutory authority are you acting? >> i am an employee of the treasury of the united states. >> sounds eminently reasonable. i want to get into the settlement question. media reports are saying that there is a $20 billion settlement. it is my understanding that if the u.s. government reaches monetary settlements with banks, the funds would go to the u.s. treasury. that is how -- a very standard process over the course of our nation's history. it would not be legally permissible for the hud or cfpb or any other regulator to resolve these matters by having fun is directed to any other place then back to the taxpayers. to allocate some funds, which you need to come back to congress for authorization to spend? -- would you need to come back to congress for authorization to

spend them? >> congressman, we are not involved, we are not negotiating with anyone at the consumer agency. this is a law enforcement matter. it is headed by the department of justice and their financial fraud enforcement task force. >> you are not engaged in these discussions? >> negotiating -- >> reclaiming my time. are you engaged in these discussions? >> negotiations with private parties are entirely directed by the department of justice, by the state attorneys general, by other federal agencies. >> so you are not engaged in these discussions? >> we do not negotiate with private parties. we have been asked for advice, and wherever we can be helpful, we are proud to be helpful. >> thank you. mr. hinojosa, five minutes? >> thank you, madam chairman. >> thank you, madam chairman.